June 3, 2010

Disparate Impact: How it works

How could disparate impact legislation lead to de facto quotas? Let's check out an NYT article on the gigantic gender discrimination lawsuit against Walmart. Note how frequent (and how uncontroversial) are the article's references to Walmart not being quite aggressive enough in imposing quotas on itself to avoid a huge payout:
More than six years before the biggest sex discrimination lawsuit in history was filed against Wal-Mart Stores, the company hired a prominent law firm to examine its vulnerability to just such a suit.

The law firm, Akin Gump Strauss Hauer & Feld, found widespread gender disparities in pay and promotion at Wal-Mart and Sam’s Club stores and urged the company to take basic steps — like posting every job opening and creating specific goals to promote women and minorities — to avoid liability....

Without significant changes, the lawyers said in their confidential analysis, Wal-Mart “would find it difficult to fashion a persuasive explanation for disproportionate employment patterns.”

In 2001, seven women filed a class-action suit on behalf of all women working at the company. They complained of a general pattern of discrimination in pay and promotions.
Wal-Mart, the world’s largest retailer, has denied any systematic discrimination and asserts that any claims should be tried individually, not as a class action that would sweep in more than a million current and former employees.

Akin Gump estimated that for 1993 alone, Wal-Mart’s potential legal exposure in a class-action sex discrimination suit was $185 million to $740 million. Mr. Seligman said the women suing Wal-Mart were seeking damages for every year since 1997, meaning the company could be on the hook for billions of dollars.
The report examined employment patterns at all Wal-Mart and Sam’s Club stores. It found that men employed by Wal-Mart as department managers, an hourly position, earned 5.8 percent more than women in those positions in 1993 ($236.80 versus $223.70). Men in salaried jobs earned $644.20 a week compared with $540.50 for women.

Akin Gump also found large disparities in job assignments. Fifty-five percent of women were initially hired as cashiers compared with 12 percent of men. Twenty-nine percent of men were initially hired in receiving jobs like unloading, which generally pay at least 20 percent more than cashier jobs, compared with 7 percent of women.

I'm utterly baffled coming up with any reason other than sheer malignant irrational prejudice why Walmart would hire more men than women to unload trucks. What possible reason could there be? Clearly, Walmart is a totally irrational organization that doesn't know anything about how to, say, unload trucks. No doubt, Walmart will become much more efficient after this lawsuit. Walmart should thank the plaintiff's attorneys for helping them get better at unloading trucks.
The law firm found smaller, but still significant, disparities in the company’s employment of black employees.

The report warned that the overall disparities it found were “statistically significant and sufficient to warrant a finding of discrimination unless the company can demonstrate at trial that the statistical disparities are caused by legitimate, nondiscriminatory factors.”

... Mr. Tovar, the Wal-Mart spokesman, also said that in the last five years, Wal-Mart has told its 50,000 managers to promote more women and minorities, with 15 percent of managers’ bonuses tied to achieving diversity goals. Women now hold 45.8 percent of assistant store manager positions — a pipeline to higher-level jobs — up from 39.7 percent five years ago.

Employment experts say there can be innocent reasons for the types of disparities found by Akin Gump. For example, women might apply disproportionately to be cashiers and men disproportionately to work in receiving. But there could be improper discriminatory reasons for the differences, like managers believing that cashier jobs are for women.

Akin Gump recommended that Wal-Mart document applicants’ job preferences, post notice of all openings and training opportunities, establish promotion goals and timetables for women and minorities, and monitor progress. ...

Company documents and depositions in the lawsuit suggest that Wal-Mart’s initial adoption of the report’s recommendations was fitful and incomplete.

Wal-Mart began posting more, but not all, job openings and adopted numerical goals [in business, the term "goals" is interchangeable with the term "quotas"] for promoting women. But in a February 2000 memorandum to Wal-Mart board members, Coleman H. Peterson, executive vice president for human resources at the time, bemoaned the lack of progress toward diversity goals.

“Female management representation at Wal-Mart super centers, Sam’s and logistics and, therefore, total company are worse than prior year,” he wrote in the memorandum, which was turned over to the plaintiffs.

... Mr. Seligman, the plaintiffs’ lawyer, says the Akin Gump report, which he has not seen, would seem to confirm that “top managers were fully aware that women were not getting promoted in proper numbers.”

Let's review the number of references in this one article to de facto quotas:
- creating specific goals to promote women and minorities
- 15 percent of managers’ bonuses tied to achieving diversity goals
- establish promotion goals and timetables for women and minorities, and monitor progress
- adopted numerical goals for promoting women.
- proper numbers

18 comments:

Bill said...

I'm utterly baffled coming up with any reason other than sheer malignant irrational prejudice why Walmart would hire more men than women to unload trucks. What possible reason could there be? Clearly, Walmart is a totally irrational organization that doesn't know anything about how to, say, unload trucks

It isn't the truck unloading that's the issue here -- it's that those guys make more money than the cashiers.

If Wal-Mart adjusted the pay scale by paying the truckers/warehousemen less and the cashiers more this wouldn't be an issue.

The problem is that shipping is more difficult and dangerous than cashiering, so one would think it's fair that they receive more. However, that isn't how things work any longer.

Now that feminism/affirmative action has reached its logical conclusion, we find that it is pretty much exactly "from each according to his ability, to each according to her 'need'."

stari_momak said...

Waiting for the punch line ... the onion, right? Right?

mark said...

If you accept the logic of disparite impact then just about every organisation in the country must be vulnerable to a lawsuit sans a 50:50 quota.

I wonder what the future for Walmart is though. The Walmart model has been all conquering for some time however it's big box out of town stores and the fact that so much of its merchandize comes from China makes it vulnerable to the following:

i) a permanent spike in the oil price - either because of peak oil or Asian demand. At $140+ a barrel the economics of making and shipping stuff from China and consumers driving to the Walmart starts to break-down.

ii) a permanent rise in the value of the Yuan vis-a-vis the US dollar. This will make Chinese goods more expensive and price a lot of Walmart's customers out of the stores.

Whiskey said...

Mark, don't forget to add protectionism, trade wars, Chinese backing for North Korea invading the South, fracturing supply chains (South Korea makes most of the raw flatscreens) and Chinese bubble collapse in housing.

jack strocchi said...

Steve S quoted:

Employment experts say there can be innocent reasons for the types of disparities found by Akin Gump. For example, women might apply disproportionately to be cashiers and men disproportionately to work in receiving. But there could be improper discriminatory reasons for the differences, like managers believing that cashier jobs are for women.

I dont know why anyone would make the assumption that burly, grumpy men would be good material for truckies and lightly built, sunny-dispositioned women would be good material as check-out chicks.

Obviously only someone whose mind was completely distorted by sexism.

Really, one wonders how these people keep a straight-face when bringing these suits.

rightsaidfred said...

Maybe Wal-Mart's next business model will be cherry picking data and filing class action lawsuits. Seems to be a growth industry.

tonk said...

shit, i'm getting to the point where i wish i was a minority or jewish so that i could also have a career boost.

Barack Mugabe said...

Disparate impact is communism, plain and simple. THIS is the problem with the 1964 Civil Rights Act. Please write your next book about this issue (tying in mass non-white immigration as well?)
This could be a huge issue for conservatives if they knew what the heck they were talking about.
Rand Paul needs to read your stuff!

Anonymous said...

If Wal-Mart adjusted the pay scale by paying the truckers/warehousemen less and the cashiers more this wouldn't be an issue.

And then they'd just have to find a different excuse to sue Walmart.

God, you people are so naive.

Lawsuits like this aren't about rectifying perceived social inequalities and remedying them with bluntly grotesque socio-political instruments like quotas - they're about enriching & empowering tort lawyers, and, more generally, the kinds of ethnic groups which dominate tort law [and let's not kid ourselves - there's really only one ethnic group which dominates tort law].

Over the course of the last four or five decades, Sam Walton [with his revolutionary new business model] had the temerity to put a whole bunch of ethnic middlemen out of business [thereby destroying an entire class of ethnic rent-extractment & enrichment strategies], and now it's payback time.

They're out for blood - this is ethnic warfare, pure and simple.

Anonymous said...

rent-extractment = rent-extraction

Kylie said...

From the NYT article..."Employment experts say there can be innocent reasons for the types of disparities found by Akin Gump. For example, women might apply disproportionately to be cashiers and men disproportionately to work in receiving. But there could be improper discriminatory reasons for the differences, like managers believing that cashier jobs are for women."


Which came first, the chicken or the egg? If those managers believe that cashier jobs are for women after observing that women "disproportionately" apply for cashier jobs, then those managers' reason for assigning cashier jobs to women "disproportionately" is just as "innocent" as the women applying for the jobs in the first place.

greenrivervalleyman said...

The funny thing is that it's SWPL's agitating for jobs that they would never in practice consider for themselves or their daughters. Women truckers, teamsters, road crew workers, and army MP's are exactly the sort of "blue-state", downscale whites that Kagan, Hillary Clinton, Nancy Pelosi, etc. instinctively turn up their noses at. Don't you think the Clintons would be horrified if Chelsea made a career out of laying down asphalt, or even serving as a mid-ranking officer in one of the armed forces?

The point is not really to provide opportunities, then, but to bend the rest of society to their egalitarian agenda.

jody said...

i've heard from multiple people that UPS loader and UPS unloader are two of the most brutal, unforgiving jobs in america. lots of guys quit the first day.

i wonder if at some point, UPS will be sued and a court will force them to hire more women for loader and unloader. i guess the women will survive 1 whole hour before throwing in the towel. getting 1 hour of work out of a new employee after spending 2 days on giving them orientation? the court will be forcing UPS to completely waste it's time, hundreds of times per year. even women who could (barely) handle the physical demands of stacking all those packages, would probably break down mentally the first time the supervisor checks for what UPS calls "max density". he comes to your truck, looks at the tetris-style order you have stacked the packages into for the last 30 minutes, and then throws the whole wall of packages to the ground violently, then shouts in your face "MAX DENSITY" and walks away.

maybe UPS will actually be forced to break out the zip code part of the loader job, so women would have at least something not physical which they could (barely) do. lots of guys fail the zip code sorting test at UPS. the failure rate for women would be even higher. so in 2020, UPS could reduce the efficiency of their entire national operation so they could accomodate all 12 women in america who can handle the instantaneous zip code sorting as 20 packages per minute flow into the warehouse.

the women would, of course, be totally exempt from lifting any of the "iron", which is what the UPS people call packages over 70 pounds. the men will be forced for cover for the women there.

More Anon said...

"the company hired a prominent law firm to examine its vulnerability to just such a suit."

What are the costs of compliance and defensive measures like these?

If these lawsuits weren't such low-hanging fruit, how much would businesses save?

Another cause of the "Diversity Recession." Somebody needs to quantify this.

Anonymous said...

greenrivervalleyman: The point is not really to provide opportunities, then, but to bend the rest of society to their egalitarian agenda.

More Anon: Another cause of the "Diversity Recession." Somebody needs to quantify this.

These folks win both coming and going [to quote Steve from another recent essay, "In other words, heads I win, tails you lose."].

First they [Akin Gump Strauss Hauer & Feld] take the initial extortion payoff, to create the anti-discrimination policy for Walmart which is supposed to shield Walmart from their ilk.

Then they [Seligman et al] turn right around and sue Walmart anyway [cf the frog and the scorpion] for even higher extortion payoffs.

And finally they [Laurence Tribe, Cass Sunstein, Martha Minow, Elena Kagan, etc etc etc] install themselves as the high priests and high priestesses in charge of ministering the new civic religion which they have created [for themselves to minister].

They're like puppeteers, dangling by the strings entire societies as their own personal marionettes.

America was founded by Antinomians, and She has absolutely no structural safeguards in place to protect Her against a determined legalistic assault like this.

In the absence of Antinomianism, an idea like "America" simply doesn't work.

ben tillman said...

First they [Akin Gump Strauss Hauer & Feld] take the initial extortion payoff, to create the anti-discrimination policy for Walmart which is supposed to shield Walmart from their ilk.

Then they [Seligman et al] turn right around and sue Walmart anyway [cf the frog and the scorpion] for even higher extortion payoffs.

And finally they [Laurence Tribe, Cass Sunstein, Martha Minow, Elena Kagan, etc etc etc] install themselves as the high priests and high priestesses in charge of ministering the new civic religion which they have created [for themselves to minister].


I'm not sure what you're saying, but if you're implying that Akin Gump is the most Jewish law firm in Dallas, then you are right.

John Seiler said...

"Twenty-nine percent of men were initially hired in receiving jobs like unloading, which generally pay at least 20 percent more than cashier jobs, compared with 7 percent of women."

Wal-Mart just needs to sell smaller stuff.

Mr. Anon said...

"In 2001, seven women filed a class-action suit on behalf of all women working at the company. They complained of a general pattern of discrimination in pay and promotions."

By what right do seven women speak for tens or even hundreds of thousands? How is it that someone is allowed to file a law suit on behalf of someone who was never asked if they wanted to be a party to it? Our system of jurisprudence never ceases to provide examples of unmitigated, arrogant gall.

On the other hand, when bad things happen to Walmart, I can only summon up laughter. So screw 'em.